DE Shaw is a quant fund that trades - we thought - exclusively computer-driven strategies. So what the heck were they doing trying to create a residential, industrial, and commercial community out in New Mexico?

Here's what happened. DE Shaw teamed up with a developer, SunCal, and purchased a piece of land double the size of Boston for $250 million in 2006.

So of course, we have to assume that DE Shaw got caught up in the real estate craze, thought land prices would continue to rise forever, and figured, there's nothing to lose!

Unfortunately, their timing was terrible - they invested in real estate almost right before the bubble burst.

And this looks really bad because it shows some questionable judgement from the fund, whose lead hedge fund manager, David Shaw, is now retired.

Are they stumbling without their star? We have to wonder.

Because whenever a fund strays from its bread and butter investing style, investors get freaked out. Two example of this are when John Paulson, formerly a M&A strategist, bet on housing, and when Phil Falcone announced recently that his hedge fund, Harbinger, would fund a new wireless network. In both cases, their investors worried.

But at least in those two cases, the hedge fund managers either succeeded, in Paulson's case, or the verdict is still out, in Falcone's case.

DE Shaw's failure - Barclays foreclosed on the failed property last month - and the negative repercussions - the fund laid off many people in its real estate division recently - are evident.